Larry Atkinson, a truck driver from Charleston, South Carolina, thought he was living the dream when he climbed into his new Kenworth T680 as a lease operator with Super Ego after previously driving company-owned trucks. “It was cool,” he recalled. “I felt like I was my own boss, I could turn down loads, and I wouldn’t have to go up north in the winter if I didn’t want to. It was a good feeling.”
But Atkinson says he soon realized he wasn’t in control, and his dream dissolved when he discovered the carrier was altering rate confirmation sheets from third-party brokers to appear lower than the contracted prices, then paying him off the fraudulently reduced amounts. Atkinson confronted a dispatcher who denied his claim, leaving him angry, frustrated—and feeling he had no recourse to right this wrong.
“It rubbed me the wrong way,” he said. “Basically, I felt helpless, like I didn’t have any angles. I’m just a guy who wants to take care of his family, and someone is taking from me—taking from my kids, taking from my family, and taking from my household—and there was nothing I could do about it.
“I could scream and shout—but it was going to happen regardless.”
Atkinson kept trucking for a while, but eventually sought legal advice, and joined with five other plaintiffs in August 2022 to file a class action lawsuit against Super Ego Holding, affiliated carriers, and other defendants in the U.S. District Court for the Northern District of Illinois. James Stark, a transportation attorney with Frame Zeller who serves as co-counsel on the case, says similar lease-purchase abuses are an epidemic—and Chicago is the epicenter—prompting him to present a detailed, nine-page executive summary on the issue to the Federal Motor Carrier Safety Administration’s Truck Leasing Task Force during its first in-person meeting in March at the Mid-America Trucking Show.
And while Atkinson decided to fight back, Stark says lease-purchase abuse is driving many potential tank truck driver candidates out of the industry. “I talked to almost 1,000 drivers abused in lease-purchase agreements over the past two years, and almost every one of them told me they are leaving over-the-road trucking forever because this is ‘how it is’ in the marketplace,” said Stark, who is married to Bailey Glendenning Stark, CEO of Glendenning Brothers, a bulk hauler based in Stillman Valley, Illinois, just west of Chicago, and chairman of National Tank Truck Carriers’ Workforce committee.
Bailey says negative lease-purchase experiences are hindering her efforts, and Stark worries owner- and lease-operator abuse by “fly-by-night” carriers in other segments will negatively impact tank truck companies in other ways, including suppressing load rates, driving up already-exorbitant insurance premiums—and making everyone guilty by association. “If you love trucking, the owner-operator model is a great opportunity,” said Ward Best, vice president of Atlantic Bulk Carrier, and the newly elected NTTC chairman.
“But if they’re going to be abused and chased out of the industry, that’s something we all need to be concerned about.”
Super Ego complaint
Atkinson’s case centers on alleged violations of the Truth in Leasing Act, which requires carriers who are compensating drivers based on a percentage of the load to show those drivers the broker-supplied rate-confirmation sheet. “We allege Super Ego did show drivers those rate confirmation sheets, but they altered the price on the sheets to make the load revenue appear lower than the amount the broker actually paid them,” said Emily Brown, co-counsel, and partner at Hughes Socol Piers Resnick & Dym.
“We also allege they were taking deductions from drivers’ pay for the truck and trailer lease-purchase, and fuel, escrow, gas, insurance, maintenance, and ELD fees, to the extent that drivers were sometimes driving 3,000 miles in a week and receiving a settlement statement with a negative number on it. So we allege they were, in some weeks, paying drivers less than the federal minimum wage.”
The complaint further alleges Super Ego charged drivers full price at the pump, even though the carrier was receiving a fuel-card discount—and all these abuses are part of a “longstanding scheme to defraud owner-operators/lessors” by defendants who “comingled their businesses and operated interchangeably to illegally misuse their federal operating authorities; and commonly shared drivers, dispatchers, and other staff, in contravention of the drivers’ contracts, shipping documents, and federal regulations.”
Atkinson’s attorneys now are waiting for a ruling on their request to add three more affiliated carriers and five more plaintiffs to the complaint. Brown said her firm also received “consent-to-join” forms from more than 640 individuals who’ve indicated they want to participate in the minimum wage claims in the case, and the Super Ego complaint is one of a handful of similar cases they’re working on.
“Truckers are angry—and they’re paying attention,” she said.
Super Ego filed a partial motion to dismiss the complaint but was denied. It hasn’t officially responded to the allegations in the case yet, and Super Ego’s attorney, David Krueger, did not reply to Bulk Transporter’s request for comment.
Stark, who has studied lease-purchase and owner-operator issues for several years, estimates there are 50 similar cases in federal courts across the country at any given time, with a large majority originating in the Chicago area. He also claims the worst lease-purchase abusers are foreign-owned companies that are sending stolen funds overseas, where they’re difficult to recover. “This isn’t one carrier,” he said. “There are thousands of companies across the marketplace doing this every day. It’s billions of dollars that should have gone to U.S. drivers—because they earned it—leaving the country every year.
“This hurts American families and the U.S. economy.”
That’s why Stark, who typically represents carriers, is siding with drivers this time.
“It’s horrible to see what’s happening, and not enough people understand the nuances of transportation law,” he said. “But going after the bad-actor companies really helps my carrier clients, too, because this type of bad practice is crippling—to the driver pool and the rate market as a whole.”
Lease-purchase report
Driven by his concerns about abused drivers with hazmat endorsements leaving the industry, and the potential negative repercussions for bulk haulers like Glendenning Brothers, Stark presented his executive summary to the Truck Leasing Task Force, which, according to a Bulk Transporter source, was keenly interested in the report, as was FMCSA’s top attorney. The key assertion in the report is Truth-in-Leasing regulations don’t protect drivers in real-life situations “when considered in the context of a lease-purchase structure.”
The document outlines a “frequent” scenario in which someone who wants to be an owner-operator and can’t afford to purchase their own equipment pursues a lease-purchase opportunity but ends up in a “bait-and-switch” scheme. “You are handed two (or more) very lengthy take-it or leave-it contracts, loaded with ambiguous or outright misleading terms that are often indecipherable for the average person, and not provided with any meaningful opportunity to read the tedious lease-purchase and driver-lease agreements,” the summary states. The driver then faces a series of obstacles, including uninspected equipment, unexpectedly low settlements, exorbitant maintenance expenses, improper deductions, and “intentionally misleading, intentionally vague” contract language.
“You take the average driver, put him in an office, and give him an 80-page contract to sign, and he’s not going to read all of it,” Atkinson concurred.
“So when they sign that contract, they’re setting themselves up for failure.”
The summary further explains how drivers in this scenario have a “right without a remedy,” why companies take advantage of drivers, safety concerns, and the economic impact of abusive lease-purchase cases. “Any time a company is undercompensating its workers, it negatively affects the market, whether that’s making it so other companies have to undercompensate their workers, too, in order to compete, or that workers are no longer willing to do those jobs,” Brown added. “It’s a major issue.”
Another key assertion is that bad actors are manipulating hours of service through “illegal arrangements” with electronic logging device (ELD) providers who build in backdoors that carriers “exploit to alter logs in real time,” as highlighted in a recent paper published by researchers at Colorado State University. Cicely Waters, director of FMCSA’s communications office, told Bulk Transporter the administration is aware of the issue and has revoked ELDs for “the ability to change or manipulate HOS.”
“Laws exist, but there isn’t a timely way to enforce them,” Stark said. “So drivers have a legal right, but they’re left without an effective remedy that’s sufficient, accessible, reasonably prompt, and deters future illegal conduct. Drivers can sue in court, but if they’re going to try to do it themselves, good luck. And if they want to hire a lawyer, they can’t afford it on a single action; it’s got to be with a class.
“That’s the only way to justify it because you’re potentially looking at a case with multi-million-dollar legal fees that’s going to take 5-7 years, or longer.”
Impact on bulk transporters
Stark says he sees lease-purchase abuse across every trucking segment—except bulk transportation, with elite drivers, direct shipper relationships, and pricey equipment helping “insulate” the space from bad actors. But he worries lower spot rates will lead some to consider tank trucking for the first time. “If that happens, it will leave all the good actors in bulk open to major market exposure,” he warned.
Rate suppression—and its detrimental impact on safety—is of particular concern for tank truck carriers, Ward added. “The tanker industry, it’s fair to say, has spent billions of dollars on safety for their fleets, safety training for their drivers, and new technological innovations,” he said. “Those things all are baked into the cost for tank truck carriers, and they’re not necessarily a financial burden on other carriers. And for any business—large, small, single operator, or hundreds of operators—everybody must consider the top-line cost and what they can get out of the bottom-line numbers.”
Bad actors with little to no insurance also are driving up premiums for all carriers. But Ward’s greatest concern is the impact abuse is having on an already-shallow labor pool, which NTTC is trying to address through its “See yourself in a tank truck” branding campaign. He’s seeing more candidates who are “very much spoiled” on lease-purchase programs, he said. “And I wouldn’t be surprised to learn there are drivers who are spoiled on the entire industry because of bad experiences,” he added.
In search of solutions
Atlantic Bulk doesn’t use lease- or owner-operators, but Ward is careful to point out owner-operators are essential to the industry. “I don’t think we should be limiting options when we’re looking for qualified drivers,” he maintained. Stark agrees but says FMCSA should define owner-operators more clearly as drivers who own their own equipment; maintain their own DOT and MC authorities; have their own insurance and registered plates; report and pay their own IFTA; and work for a variety of shippers, brokers, and carriers on a regular basis. “Realistically, under most lease-purchase structures, drivers are only permitted to work for the carrier leasing the truck to the driver,” Stark said.
Lease-purchase opinions among the task force members vary, according to Bulk Transporter’s source. And while some people believe exploitative cases are isolated incidents, others—much like Atkinson—insist further regulation is necessary to protect drivers. Brian Burns, president of Advanced Transit, a freight broker based in Illinois, says “double-brokering”—or dispatchers “brokering” brokered loads to owner-operators—contributes to lease-purchase abuses. But he believes better enforcement is the answer.
“Adding more regulations? I don’t see how that helps anything,” he said.
Stark agrees enforcement of existing laws, including requirements established in the Truth in Lending act, is lacking, and contends FMCSA doesn’t have the capacity to enforce more regulation when one large bad-actor carrier can produce “tens of thousands” of claims, leaving him to question if the lease-purchase structure is salvageable.
“Going to court is not enough,” he insisted. “That’s not a sufficient remedy.”
Still, Stark examined six proposed solutions in his report, including requiring lease-purchase candidates to have a certain level of experience, allowing only third-party leases, requiring carriers to carry special bonds, and imposing personal liability on owners. “At this point, we’re just hoping for partial solutions,” he said.
FMCSA’s Truck Leasing Task Force is likely to examine all of these solutions and more as it continues its fact-finding mission, which appears to be gaining momentum. The agency announced May 29 the task force will hold two public meetings this summer, set for June 13 and July 18, after only four in the first year. “I think there’s probably going to be some redrafting in the legislation itself,” Stark predicted.
All Atkinson knows is something needs to change.
“It’s not OK,” he said. “Drivers do matter. Period. People’s families matter. The way you handle business matters.
“That’s the message I want to send.”
